
Brent futures fell 27 cents, or 0.4%, to $73.12 a barrel by 0701 GMT. U.S. West Texas Intermediate crude fell 39 cents, or 0.6%, to $70.19.
Shutterstock
Oil prices fell in Asian trade after the U.S. Federal Reserve signaled it would slow the pace of interest rate cuts.
Brent futures fell 27 cents to $73.12 a barrel, while U.S. West Texas Intermediate crude fell 39 cents to $70.19.
The Fed's projected two quarter-point interest rate cuts in 2025, down from previous expectations.
Oil prices fell in Asian trade on Thursday after the U.S. Federal Reserve signaled it would slow the pace of interest rate cuts in 2025, which could hurt economic growth and reduce fuel demand.
Brent futures fell 27 cents, or 0.4%, to $73.12 a barrel by 0701 GMT. U.S. West Texas Intermediate crude fell 39 cents, or 0.6%, to $70.19.
The declines reversed most of the benchmark contracts' gains from Wednesday, when prices settled higher as U.S. crude stocks fell and the U.S. Federal Reserve cut interest rates by 25 basis points as expected.
Fed's inflation concerns
Prices weakened after U.S. central bankers issued projections pointing to two quarter-point interest rate cuts in 2025 on concerns about rising inflation. That was half a point less than they had anticipated as of September."
After yesterday's FOMC meeting, the Fed has now portrayed a less dovish monetary policy guidance next year...(this) implies lesser (trading) liquidity that may put a cap on demand for oil," said OANDA senior market analyst Kelvin Wong.
Lower rates decrease borrowing costs, which can boost economic growth and demand for oil.
"The demand-supply balance going into 2025 continues to look unfavorable and predictions of more than 1.0 million bpd demand growth in 2025 look stretched in our opinion. Even if OPEC+ continues to withhold production, the market may still be in surplus," DBS Bank's energy sector team lead Suvro Sarkar said.
Although demand in the first half of December rose year-on-year, volumes remained lower than expected by some analysts.
JP Morgan analysts said in a note that global oil demand growth for December so far was 700,000 barrels per day less than it had expected, and for the year-to-date, global demand had risen by 200,000 bpd less than it had forecast in November 2023.
Official data from the Energy Information Administration on Wednesday showed U.S. crude stocks fell by 934,000 barrels in the week to Dec. 13, compared with analysts' expectations in a Reuters poll for a 1.6 million-barrel draw.
Popular
Spotlight
More from Business
Pakistan’s raises 1,194 billion through sale of T-bills, PIBs and Ijarah Sukkuk
Yields on all tenure T-bills increase after a month
More from World
EU seeks early US talks to avert Trump tariffs
Trump has said EU is next in line after Canada, Mexico, China; Von der Leyen sees tough negotiations, will protect EU interests
Comments
See what people are discussing